De-risking of the West and China: Potential problems for the European Union

Goran Nikolić ORCID logo

Published on 29 September 2023

АBSTRACT: The text provides an overview of the most current trends in the relations between the West and China in terms of political economy. We see primarily the USA and the European Union as the West, two actors of significant economic power whose decisions influence the world far beyond their own borders. The paper starts from the premise of recognised economic interdependence between the West and China in the period of rising political tensions, differences in publicly proclaimed interests, and the already existing sanctions regime. Increasing talk of a strategic “separation and a “new Cold War” era point to a tendency to reduce economic interdependence to alleviate economic risks (“de-risking”) if a potential conflict escalates to the level of broader sanctions or war. The paper provides an overview of some possible consequences of such a dynamic, with a focus on the European Union and the Eurozone in a separate section.

KEY WORDS: West, United States of America, European Union, China, de-risking, interdependence.